Part I: How to pay for fire hydrants?


Submitted a year ago
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norwichobserver

The Approach Of Water Companies In General

How to pay for fire hydrants? To give this question context, the Town paid $11,700 to the Norwich Fire District for “hydrant rental,"  representing 20% of the cost of the fire protection hydrant system that primarily serves the Village. The amount is going to increase to over $16,000 says the Fire District.  That is overhead not water use. In contrast, the Town allocated $400 this year to maintain dry hydrants. Is $11,000 or $16,000 a fair price for the Town to pay? Residents living within a 1000 feet of a Fire District hydrant likely get a discount on home insurance. But most residents do not get that benefit.  When fire hits an outlying location, the fire department can set up a tanker shuttle from a Fire District hydrant to run water to the site. Is paying 20% of the overhead a fair exchange for the ability to run a tanker shuttle? 

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I don't know the answers.  In a series of posts, I plan to examine the hydrant rental cost structure in place in Norwich. This Part I looks generally at the hydrant infrastructure and how water companies pay that expense. Part II will discuss the Norwich Fire District approach, as it involves the Town.  Part III - stay tuned. 

After giving the Fire Department to the Town in 1989, the Norwich Fire District mostly considers itself a water company (with some residual responsibility for sidewalks).  Like most water companies, the Fire District provides drinking water to customers and delivers water for fighting fires. To perform the latter, the water company needs added infrastructure in order to provide the high flows and pressures needed to fight fires. In addition to hydrants, such a fire protection system requires “larger pipes, more pipes, a larger reservoir, [and] a more powerful pump,“ states the draft minutes for December 18, 2017 meeting of the Norwich Fire District. The cost of water for fighting fires is "relatively insignificant" compared the infrastructure costs, according to a 2016 report of the Wisconsin Public Service Commission at page 3. 

A water company can recover the repair and maintenance costs related to its fire protection system in several ways. Most commonly, it direct bills the customer, based on water use or in a separate charge - sometimes called a fire protection fee. Where the water company has taxing authority, as is the case of Norwich Fire District, it can raise money through property taxes, although a drawback is that tax exempt properties do not pay. When a private or municipal water company charges the general municipality it serves, rather than the water customer, the term “hydrant rental” might be used. The term is not unique to Vermont or New England. In the hydrant rental situation, the municipality then recovers the cost through general property taxes.

All of the methods have a common denominator, in that the water company customer pays for the fire protection infrastructure. That is also the case in the hydrant rental scenario too because typically all residents of the municipality are also customers of the water company. In Norwich, the situation is different. Most residents are NOT customers of the Fire District’s water company. Nevertheless, since the the Fire District charges the Town for 20% of the fire protection system, all taxpayers bear part of the cost. 

Is that fair? I don't know. But some residents benefit monetarily. Those within 1000 feet of a Fire District hydrant get a discount on homeowner’s insurance, according to my local insurance agent. 

Question: How do other towns and fire districts in Vermont address the issue of hydrant rental, when most residents do not get their water from the the fire district? Anyone know?

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